A.M. Best Affirms Ratings of Lloyd's Syndicate 382; Assigns Ratings to Hardy Underwriting Group plc.

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and the issuer credit rating (ICR) of "a+" of Lloyd's Syndicate 382 (United Kingdom), which is managed by Hardy (Underwriting Agencies) Ltd (HUA). At the same time, A.M. Best has assigned an ICR of "bbb" to Hardy Underwriting Group plc (Hardy Group) (United Kingdom), HUA's non-operating holding company, and a debt rating of "bbb-" to the USD 30 million subordinated notes due 2036 issued by Hardy Group. The outlook for all ratings is stable.

The ratings reflect syndicate 382's good operating performance, specialist business profile and the financial strength of the Lloyd's market, which underpins the security of all Lloyd's syndicates.

Syndicate 382's financial flexibility is also enhanced by support provided by the Hardy Group, which completed its long-term goal of purchasing the remaining 9.1% of unaligned capital provided to the syndicate and issued USD 30 million floating rate subordinated notes during 2006. This issue will support the expansion of the group's underwriting through Lloyd's Syndicate 3820, which was established for the 2007 year of

account and will operate independently from syndicate 382.

In A.M. Best's opinion, syndicate 382 is likely to report an improved return on capacity of approximately 8%-10% for the 2006 year of account, reflecting strong property catastrophe rates, a benign hurricane season and rate softening within its aviation and financial institution accounts. A.M. Best believes the syndicate is likely to record a good return on capacity of approximately 5%-7% in 2005, taking into account significant losses from the 2005 U.S. catastrophes (of approximately 16% of capacity). Although the magnitude of catastrophe losses in 2004 was lower than that in 2005, A.M. Best anticipates a similar result on capacity of approximately 6%-7% for the 2004 year of account. This reflects the syndicate's relatively high exposure to medium-sized catastrophe events, as well as losses within its financial institution and political risk accounts.

A.M. Best believes syndicate 382 benefits from a specialist business profile, writing a geographically diverse portfolio that consists primarily of aviation, marine and property short-tail risks. Syndicate 382 has maintained its capacity at GBP 110 million (USD 215 million) in 2007, with growth in its direct and facultative property account offsetting the softening rating environment in its aviation and financial institution portfolios.

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A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.